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The Free Trade Agreement Between Chile And The Eu: Its Potential Impact On Chile’S Export Industry

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Author Info
NOWAK-LEHMANN D., Felicitas ()
HERZER, Dierk ()
VOLLMER, Sebastian ()

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Abstract

Bilateral Free Trade Agreements have been used extensively by Chile to expand its exports and improve its competitive position in the world markets. It is the objective of this paper to analyze the role of trade agreements, price competitiveness, real income, per capita income differences and transport costs in Chilean export trade with the EU. To this end, Chile’s most important export sectors are investigated using panel data from Chile’s main trading partners in the EU over the period 1988-2002. The econometric model used in the simulations is a refined augmented gravity model. It is found that the FTA would strongly boost Chile’s food related exports which face high protection in the EU market.

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Publisher Info
Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 7 (2007)
Issue (Month): 1 ()
Pages:
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Handle: RePEc:eaa:aeinde:v:7:y:2007:i:1_9

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Related research
Keywords: Chile-EU trade agreement; sectoral trade flows; gravity model; panel analysis.;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "MERCOSUR-European Union Trade: How Important is EU Trade Liberalisation for MERCOSUR\'s Exports?," cege – Center for European, Governance and Economic Development Research Discussion Papers 30, cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany).. [Downloadable!]
  2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU," Open Economies Review, Springer, vol. 15(3), pages 291-314, 07. [Downloadable!]
  4. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July. [Downloadable!] (restricted)
    Other versions:
  6. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February. [Downloadable!] (restricted)
  7. Soloaga, Isidro & Winters, L. Alan, 1999. "Regionalism in the Nineties: What Effect on Trade?," CEPR Discussion Papers 2183, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March. [Downloadable!] (restricted)
  9. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 291-316, November. [Downloadable!]
  10. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March. [Downloadable!]
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  11. Bougheas, Spiros & Demetriades, Panicos O. & Morgenroth, Edgar L. W., 1999. "Infrastructure, transport costs and trade," Journal of International Economics, Elsevier, vol. 47(1), pages 169-189, February. [Downloadable!] (restricted)
    Other versions:
  12. Busse, Matthias, 2003. "Tariffs, Transport Costs and the WTO Doha Round: The Case of Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(1). [Downloadable!]
  13. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August. [Downloadable!] (restricted)
  14. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2003. "Augmented gravity model: An empirical application to Mercosur- European trade flows," International Trade 0309019, EconWPA. [Downloadable!]
  15. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January. [Downloadable!] (restricted)
    Other versions:
  16. Fritz Breuss & Peter Egger, 1999. "How Reliable Are Estimations of East-West Trade Potentials Based on Cross-Section Gravity Analyses?," Empirica, Springer, vol. 26(2), pages 81-94, June. [Downloadable!] (restricted)
  17. M. A. Mcpherson & M. R. Redfearn & M. A. Tieslau, 2000. "A Re-Examination Of The Linder Hypothesis: A Random-Effects Tobit Approach," International Economic Journal, Korean International Economic Association, vol. 14(3), pages 123-136, October. [Downloadable!] (restricted)
  18. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Blackwell Publishing, vol. 20(3), pages 363-368, 05. [Downloadable!] (restricted)
  19. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Maria Bas & Yvan Ledezma, 2007. "Trade integration in manufacturing: the Chilean experience," PSE Working Papers 2007-50, PSE (Ecole normale supérieure). [Downloadable!]
  2. Brieuc Monfort, 2008. "Chile: Trade Performance,Trade Liberalization, and Competitiveness," IMF Working Papers 08/128, International Monetary Fund. [Downloadable!]
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